What Is a Low-Appraisal Addendum in New Hampshire Real Estate?

🏡 What Is a Low-Appraisal Addendum in New Hampshire Real Estate?

In competitive New Hampshire markets — including Plymouth, Campton, Thornton, Rumney, Ashland, and other Central NH areas — homes sometimes do not appraise for the agreed-upon purchase price.

A Low-Appraisal Addendum is a written agreement that outlines what happens if the home under-appraises.

It protects both buyers and sellers by giving them clear expectations before the appraisal even happens.

Here’s how it works in NH.

⭐ What Is a Low-Appraisal Addendum?

A Low-Appraisal Addendum specifies what the buyer and seller agree to do if the home appraises for less than the contract price.

It outlines things like:

✔ Whether the buyer will cover a shortfall

✔ Whether the seller will reduce the price

✔ Whether both sides will split the difference

✔ A maximum amount the buyer will bring above appraised value

✔ Whether the buyer can walk away without penalty

It creates certainty in a situation that often causes deals to fall apart.

⭐ Why Low-Appraisal Addendums Are Common in NH

These addendums are popular in Central NH because:

• Prices have risen faster than appraisals

• Rural homes are harder to comp

• Unique homes often under-appraise

• Multiple-offer situations push prices past value

• FHA/VA/USDA appraisals can be stricter

A clear addendum prevents stressful renegotiations later.

⭐ Common Types of Low-Appraisal Agreements

✔

Buyer Covers a Set Amount Over Appraisal

Example: Buyer will pay up to $10,000 above appraised value.

✔

2. Buyer Covers Full Gap

Strongest for sellers. Buyer pays entire difference.

✔

3. Split-the-Difference Agreement

Buyer and seller each pay part of the shortfall.

✔

4. Seller Price Reduction

Seller agrees to reduce the price to appraised value.

✔

5. Walk-Away Option

Buyer can cancel with deposit returned if appraisal is low.

Each structure protects the parties differently.

⭐ Example Scenario

Purchase Price: $425,000

Appraisal: $405,000

Difference: $20,000

If the addendum states:

➡ Buyer will cover $10,000 over appraisal

➡ Seller reduces price by $10,000

The deal moves forward with clear expectations.

⭐ Why Buyers Benefit

A Low-Appraisal Addendum protects buyers by giving them:

✔ A cap on how much they’ll pay

✔ The option to exit if the gap is too large

✔ Protection from overpaying

✔ Time to prepare funds if needed

It removes a major risk in a rising-price market.

⭐ Why Sellers Benefit

Sellers gain:

✔ A stronger, more competitive offer

✔ Reduced risk of the deal falling apart

✔ Clarity on how much they may need to negotiate

✔ A backup plan if the appraisal misses the mark

In multiple-offer situations, addendums can help choose the strongest buyer.

⭐ Does Every NH Lender Allow These?

Most do — but with rules:

✔ Buyer must have documented funds

✔ Agreement cannot violate lending limits

✔ Total financing must still fit guidelines

✔ Appraisal gap coverage must be verifiable

Your lender should review the structure early in the process.

⭐ Bottom Line

A Low-Appraisal Addendum is a powerful tool for both buyers and sellers in NH.

It provides:

✔ Predictability

✔ Protection

✔ Faster negotiations

✔ Stronger, cleaner offers

In today’s Central NH market, this addendum can make the difference between closing smoothly and losing the deal entirely.

⭐ Keywords

nh low appraisal, appraisal gap nh, plymouth nh appraisal issues, campton nh home values, thornton nh real estate addendum, rumney nh appraisal gap coverage

Jim Johnson — Real Estate Agent

58 NH Route 25A

Wentworth, NH 03282

P: (857) 249-7392

W: www.JimJohnsonRealEstateAgent.com

Licensed New Hampshire REALTOR® with Three Hills Real Estate Services

Broker Email: info@ThreeHillsRES.com

Broker Website: www.ThreeHillsRES.com